Thursday, November 25, 2010

I wrote last month about "rightwing productions of history" by non-academic historians. My central point was that the political right engages in a self-conscious effort to implant (largely tendentious) memories or understandings of key episodes from the past, a process they partake in not by contesting academic historians but by bypassing them. (Note the noncoincidental similarity, here, to the way that Sarah Palin essays to channel her communications around and away from traditional media "elites" — that is, the keepers of professional standards.)

Independent scholars such as Chernow, David McCullough, Walter Isaacson, Jon This gap between popular and academic historians has probably existed since the beginning of scientific history-writing at the end of the nineteenth century, but it has considerably widened over the past half-century or so. During the 1950s academic historians with Ph.D.s and university appointments, such as Richard Hofstadter, Samuel Eliot Morison, Arthur Schlesinger Jr., Allan Nevins, Eric F. Goldman, Daniel Boorstin, and C. Vann Woodward, wrote simultaneously for both their fellow academicians and educated general readers.

This is normally no longer possible. Academic historians now write almost exclusively for one another and focus on the issues and debates within the discipline. Their limited readership—many history monographs sell fewer than a thousand copies—is not due principally to poor writing, as is usually thought; it is due instead to the kinds of specialized problems these monographs are trying to solve. Since, like papers in physics or chemistry, these books focus on narrow subjects and build upon one another, their writers usually presume that readers will have read the earlier books on the same subject; that is, they will possess some prior specialized knowledge that will enable them to participate in the conversations and debates that historians have among themselves. This is why most historical monographs are often difficult for general readers to read; new or innocent readers often have to educate themselves in the historiography of the subject before they can begin to make sense of many of these monographs.

So advising academic historians that they have to write more stimulating prose if they want to enlarge their readership misses the point. It is not heavy and difficult prose that limits their readers; it is rather the specialized subjects they choose to write about and their conception of their readership as fellow historians engaged in an accumulative science.

The problem at present is that the monographs have become so numerous and so refined and so specialized that most academic historians have tended to throw up their hands at the possibility of synthesizing all these studies, of bringing them together in comprehensive narratives. Thus the academics have generally left narrative history-writing to the nonacademic historians and independent scholars who unfortunately often write without much concern for or much knowledge of the extensive monographic literature that exists.

A deep divide between two almost irreconcilable camps runs through Europe. German Chancellor Angela Merkel heads one camp, consisting of the northern European countries. Merkel sees herself as the defender of a culture of stability of the sort that Germany has maintained since the days of the deutschmark. Her goal is to prevent the monetary union from becoming a kind of transfer union, with Germany as paymaster.

The second camp consists of the so-called PIIGS states, which have accumulated too much debt in the past and are now hoping for help: Portugal, Italy, Ireland, Greece and Spain. They want the thing that Merkel wants to prevent: a union in which the strong pay for the weak. Europe's institutions are now maneuvering between these two camps.

Certainly, that's how Berlin would like to portray the issue: as a bunch of lazy, profligate Southerners who are trying to get the industrious Germans to pick up the tab for years of spendthrift freeloading.

Of course, there's an alternate perspective of the underlying causes of the Euro zone crisis, namely that the real driver was the actions of German and French bankers, who after providing the credit that fueled a mad speculative bubble, now want to make the taxpayers and social service consumers of the South bear all the burden of the shared folly. Naturally, this is the narrative preferred in Rome, Madrid, Lisbon, and Athens.

From the perspective of the PIIGs, in other words, the question is whether the Germans can get away with imposing what amounts to a vicious structural adjustment program (SAP) on their fellow euro-zone members. In other words, are the Germans going to be allowed to do to PIIGs what the US did to Latin America in the aftermath of the 1983 debt crisis?

That story is worth remembering in some detail. What happened in that case was that US banks, flush with petrodollars from the Middle East, had gone on a huge lending spree in the 1970s to Latin American governments, which used the money on a mixture of corrupt payoffs for rich elites and promises of social welfare for the middle classes. By the early 1980s, as interest rates skyrocketed, these countries were no longer able to service their debts. Mexico declared in 1982 that it was not going to pay, several other Latin American countries followed suit, and for a few months that winter it looked possible that the entire global capitalist banking system might implode.

To make a very complicated story short, what happened next was that the U.S. and the IMF agreed to restructure the Latin Americans' debts, in exchange for the imposition of "structural adjustment." The SAPs contained a number of critical elements, which in principle were designed to ensure the fiscal health of the debtor governments, but which also entailed a de facto form of national and transnational class warfare: the rolling back of state ownership of key industries; the lowering of tariff barriers; the restriction of the autonomy of unions; the curtailing of price controls on food, water and other life essentials; and the scaling back of social welfare promises.

This process of economic restructuring is most often remembered as having been responsible for producing a so-called "Lost Decade," in which economic growth rates plummeted across Latin America. But arguably what went lost was something much bigger than a mere decade of productivity. In fact, the SAPs ultimately involved the wholesale abandonment of an entire social-political vision, namely the promise of "development" as a process of building a "social modernist" welfare states akin to those enjoyed in the Global North. In other words, it spelled the end of a certain kind of social dream, a certain kind of political ideal -- the dream that they would one day converge with the wealth and lifestyle of the North.

Now, the U.S. bankers and politicians could get away with destroying this dream in part because they themselves didn't really believe in that dream any longer (if indeed they ever had); in part because the U.S. people felt no political or social solidarity with the Latin Americans; and in part because Latin American elites were disunified in their response to the demands of Washington and New York

By contrast, the whole point of the European Union is supposed to be about pan-continental political solidarity in the name of building social welfare states. Furthermore, the social democratic nature of all the European governments means that throwing the middle classes under the banking bus is anathema - especially if it's "our" (Greek, Spanish, etc.) middle classes and "their" (German, French) banks.

So that's the key question: Is the European Union a fundamentally socially democratic institution? a collection of social and political equals who will stand together in a time of hardship? If that's the case, then the Germans will have to pay. Or alternately, will the Germans succeed in getting the taxpayers and social service consumers in the PIIGs to pay? In which case the beautiful dream of pan-European solidarity will be revealed as a lie, and it's hard to see how the European Union survives as a political project.

Milton Friedman famously predicted that the European Monetary Union would not survive the first recession. The political assumption underpinning this prediction was that the Germans ultimately did not feel political and social solidarity with Italians, the Greeks, and so on, and that in a crisis, the Germans would refuse to pay for the Southerners and the Southerners would refuse to take the German medicine. We're about to find out if Friedman was right.

Sunday, November 21, 2010

For a good sense of what development in Africa today is and isn't, you can do worse than to read this excellent if troubling New York Times article on Chinese business practices in Zambia:

As in many other African nations, the Chinese are an enormous economic presence in this impoverished but mineral-rich country.... Chinese investment here amounted to $1.2 billion in just the past year, according to the government. Nearly two-thirds of new construction involves Chinese-run companies, said Li Qiangmin, the Chinese ambassador in Lusaka, the capital. In this nation of 12 million where a small minority of workers, perhaps one in 10, have salaried employment, the 25,000 jobs provided by Chinese-backed businesses and projects are badly needed.

But many Zambians complain that these powerful foreigners are permitted to play by their own rules, plundering the country more than developing it and abusing workers as they go.

You see here the direct backlash against "thin" forms of extraction, in contrast to the "thicker" forms of development that existed in the past.

The standard early postcolonial relationship of extraction was that the foreign investors got the minerals and/or cheap labor, and the locals got "development" in return, the latter understood as the building of institutions and infrastructure that would direct the nation-state as a whole toward eventual attainment of a liberal welfare state. This noble idea was of course more honored in the breach than in the observance, but nonetheless, it was a deal that made a certain kind of sense - both sides were clearly supposed to be getting something worthwhile out of the relationship. This arrangement, this ideological ideal, is what I refer to as "modernist" developmentalism - that is, it was a form of development that aimed at creating replicas of the modernist ideal-type limned by the New Deal-ish United States.

That vision of development is long gone, killed by decades of secular economic decline, and officially buried by structural adjustment programs promoted by the neoliberals at the IMF and the Bank. (For more on this historical shift, consult James Ferguson's or Achille Mbembe's work.)

What replaced the classic postcolonial development discourse is what I would call a "post-modernist" form of developmental practice of the sort sketched in the New York Times article quoted above: we still have a foreign power - a Chinese state-controlled company, in this case - extracting minerals, but there is no longer any pretense about providing a wider, deeper, "thicker" kind of development that benefits the Zambian people and nation as a whole. On the contrary, with the Chinese bringing in their own labor and their own technology, their impact on the local economy is more or less ring-fenced around the mine head. And while the Chinese like to present this form of investment as a sign of their respect for the "sovereignty" of the local peoples, it's not at all clear what the local (in this case) Zambians get out of this sort of deal. Hence the backlash.

The facts of the past decade are pretty clear, after all. George Bush inherited an uncommonly vigorous economy from Bill Clinton: growth was high, business was booming, wages were growing, and the federal government was running a surplus. This ended in 2001, but it ended with one of the mildest and shortest recessions on record and provided Bush with a chance to fully apply Republican orthodoxy to the economy: multiple rounds of tax cuts, light regulation, and the most business friendly atmosphere from the White House imaginable. The result was catastrophic. The Republican expansion from 2001 through 2007 was the weakest since World War II: productivity and GDP gains were mediocre, employment growth was weak, and wages were stagnant. Only corporate profits prospered. And this period of historically weak growth was ended by a financial disaster worse than any since the Great Depression. That's the Republican legacy of the aughts: a strong economy turned first anemic and then completely crippled.

My only quibble is that I would argue that the seeds of the crisis were laid much earlier, in the deregulations and tax-cutting of the 1970s and 1980s. These policies inaugurated the intertwined processes of deindustrialization, growing inequality in income and wealth, and exploding personal debt that are at the root of the crisis.

But these too were projects and policies of the right, so in terms of political score-keeping, this longer history only buttresses Drum's analysis.